Posted by tecwrg on 2/28/2013 11:27:00 AM (view original):How long should we pretend that an out of control spending spree on the part of the government, spending money they don't have, is OK before you finally decide it's a problem?

Never?

Is it out of control? It seems to have leveled off over the last couple years.

Most of the deficit is taken care of by a recovered economy. But it is something that needs to be addressed. I'm arguing that it should be addressed after the economy recovers so that we don't fall back into a recession when spending is cut.

If people believe that the economy is going south, they won't buy that big ticket item on installment... because they're worried about their job. They won't invest in their house because they don't think they're gonna make their money back when they sell. Businesses don't pick up more employees because they don't anticipate revenue growth, so hiring is supressed.

Posted by toddcommish on 2/28/2013 11:53:00 AM (view original):If people believe that the economy is going south, they won't buy that big ticket item on installment... because they're worried about their job. They won't invest in their house because they don't think they're gonna make their money back when they sell. Businesses don't pick up more employees because they don't anticipate revenue growth, so hiring is supressed.

Posted by tecwrg on 2/28/2013 11:27:00 AM (view original):How long should we pretend that an out of control spending spree on the part of the government, spending money they don't have, is OK before you finally decide it's a problem?

Never?

Is it out of control? It seems to have leveled off over the last couple years.

Most of the deficit is taken care of by a recovered economy. But it is something that needs to be addressed. I'm arguing that it should be addressed after the economy recovers so that we don't fall back into a recession when spending is cut.

Are we still running a deficit?

Is the debt continuing to grow?

Should we have any confidence that the current president and the current congress can or will turn the deficit into a surplus, and start paying down the debt?

Can the debt continue to grow and grow ad infinitum before the whole thing eventually falls apart?

If and when that happens, will that have a positive or a negative impact on the economy?

Posted by bad_luck on 2/28/2013 12:06:00 PM (view original):No one, I think. The disconnect comes when you try to tie consumer confidence to the deficit level. It's bullshit.

Consumer confidence. If people don't spend, revenues go down. What part of this is so hard to understand?

I assume you don't believe that the deficit affects consumer confidence. Alone, it probably doesn't. Yet we don't live in a vacuum. As I mentioned earlier, the news is dominated by talk of the rising deficit, increasing tax rates, out of control govt spending and Obama's recent doomsday proclamation due to the sequester. People hear these things. They believe our govt cannot reduce the deficit, that they cannot control spending and that the only way to resolve this is to raise taxes. And that affects CC.

You find your subject. You decide your point. You attempt to lead someone down a specific path with a question in hopes of your "gotcha!!!" moment. If they don't answer it exactly how you want them to, you keep asking. If they refuse, you bring up a young earth or baseball argument from November that you felt you won.

Posted by tecwrg on 2/28/2013 11:27:00 AM (view original):How long should we pretend that an out of control spending spree on the part of the government, spending money they don't have, is OK before you finally decide it's a problem?

Never?

Is it out of control? It seems to have leveled off over the last couple years.

Most of the deficit is taken care of by a recovered economy. But it is something that needs to be addressed. I'm arguing that it should be addressed after the economy recovers so that we don't fall back into a recession when spending is cut.

Are we still running a deficit?

Is the debt continuing to grow?

Should we have any confidence that the current president and the current congress can or will turn the deficit into a surplus, and start paying down the debt?

Can the debt continue to grow and grow ad infinitum before the whole thing eventually falls apart?

If and when that happens, will that have a positive or a negative impact on the economy?

Are you really that naive that you cannot or refuse to see that?

Yes we are running a deficit. Yes, that deficit is adding to the debt. But the deficit isn't growing. That's how you tell if spending is out of control.

Let's look at people who put their money where their mouth is--those that loan money to the federal government. What return do they get for that risk? It's here. Loan your money to the government for five years and you can expect a return of 0.78%. Ten years? 1.91%. Twenty years? 2.72%. And that's before inflation.

Wow, those are terrible rates for the investor and great rates for the borrower. If the federal government was such a bad risk then interested rates would have to be higher than that. That's how we know that confidence in the government's ability to repay it's obligations is high.

Posted by bad_luck on 2/28/2013 12:06:00 PM (view original):No one, I think. The disconnect comes when you try to tie consumer confidence to the deficit level. It's bullshit.

Consumer confidence. If people don't spend, revenues go down. What part of this is so hard to understand?

I assume you don't believe that the deficit affects consumer confidence. Alone, it probably doesn't. Yet we don't live in a vacuum. As I mentioned earlier, the news is dominated by talk of the rising deficit, increasing tax rates, out of control govt spending and Obama's recent doomsday proclamation due to the sequester. People hear these things. They believe our govt cannot reduce the deficit, that they cannot control spending and that the only way to resolve this is to raise taxes. And that affects CC.

"If people don't spend, revenues go down. What part of this is so hard to understand?"

I'm well-aware of what our government spends money on.
I'm equally aware that our government has no idea what a budget is or how to balance one.

You see, most people say "I have $100 after I pay my bills this week. What should I do with it?" and make a decision to spend or save.
Our government says "I'm 1 billion more in debt after I pay my bills this week. How much more should I spend and where?" It's simply unsustainable unless we intend to become a border country with no imports/exports. That's why the deficit matters.